- Find an Idea- Solve Someone’s Problem
Everything starts with an idea. Sometimes, it’s the most challenging part of starting a business endeavor. You may have the entrepreneurial spirit within you, but you may be lacking in creativity or inspiration. However, this problem has a solution: train your mind to be resourceful and curious. Most revolutionary inventions in the modern world once started as a solution to an everyday problem. You can start by constantly analyzing everyday problems that you encounter and see if these have solutions. Eventually, you can recognize and solve other people’s problems.
According to Forbes, the main reason why startups fail is the lack of market need for whatever product or service they are offering. So the best way to start and launch your business is by proposing a solution to a common problem, therefore creating a market need. If you don’t have a groundbreaking solution to a problem, don’t panic, you can still find a way to pursue your passion while giving it an element of differentiation and exploring other opportunities within your target market.
2. Market Research
Before you decide to invest in a startup, find out if there is a need and potential audience for your product or service. It is as simple as getting in front of a potential customer and asking them if they would buy your product or service.
Market research enables you to explore the viability of your business idea. This might be an expensive process for some but it doesn’t have to be. It can be as simple as passing an online survey to your friends, family and their connections to see if there is an interest in your product or service. Use current data from other companies and studies to figure out what opportunities the market is offering and its growth potential. Market research also encompasses exploring potential competitors and barriers to entry. Once you get a general picture of the environment and its possibilities, start crafting your business plan.
3. Create a Business Plan
You have your idea, you did your market research, now the next step is to create a killer business plan. The plan should answer the basic questions about your business including the problem you are solving, target market, key competitors, distribution channels, production costs, financial projections, and other basic information.
4. Get Funding
Another challenging part of starting your own venture is the amount of funding it may require. There are different approaches to this, including:
- Self funding
- Pitch Competitions
All options have different levels of risks and you must consider what will work best for you and your current situation. However, one of the most common ways is by pitching your idea to venture capitalists in exchange for ownership percentage, payback interest rates or a role in your business.
5. Make it Official- Structure & Registration
A crucial decision in starting your own business is deciding your business’ legal structure. This will determine the way your business operates on a day-to-day basis, as well as how you will be taxed, ability to fundraise and personal liability. There are many common business structures including LLC, S Corporation, Sole Proprietorship, Nonprofit, and Cooperative.
Once you decide, register your business in your state or with a federal agency, depending on whether you seek trademark protection or not. Then, register with the IRS to get your EIN number and proceed to open a business bank account. If you are a small business and don’t have a big balance, explore credit union options to open an account. You will also want to explore business insurance requirements depending on your business structure and the state you are located in.
6. Protect Your Idea – Trade Secrets, Copyright, Patents, Trademarks
There are four types 4 types of intellectual property (IP) to protect your idea:
- Trade Secrets
If you have a unique business model, product, service, name, logo or tagline, make sure you take the necessary steps to protect your assets. Do not wait long to establish copyrights, patents and trademarks on your property.
7. Track Your Money
Tracking your income and expenses is a crucial part of starting a business. Brush up on basic accounting principles, or use platforms like QuickBooks to keep track of your books. If you have a flexible budget and a somewhat complex business structure, consider hiring a bookkeeper or outsourcing the task to local accounting firms. Do not underestimate the importance and precision these tasks require to go about your accounting practices when tax season rolls around.
8. Create Your Business Email, Website & Social Media Channels
Although we live in a world where social media has become a major point of contact and reference for many businesses, it is imperative to have a proper business email address and a working website. You can use any number of email hosting providers to create a business email. There are also a number of website domain registries to register your website’s domain.
If you are just starting, you might not want to invest in website design just yet. Fortunately, there are simple and easy ways you can design a website like focusing on your story brand, using simple language and selling your benefits instead of your product/service. Having a good, updated website is important for every business, so consider hiring a web designer in the future to increase your credibility, improve SEO, and generate more leads, sales and revenue.
Social media channels will become your way to stay connected with your audience in their everyday lives. Start by researching username availabilities and building a content strategy. Depending on who your target audience is, focus your energy on the platforms that are most relevant to them and start expanding as you grow.
9. Set Your Price & Get paid
This is a very important step in the process as it will determine your profitability. Determine the business model you will use to generate revenue, like selling by unit, service, bundle, or subscription. When setting the price, consider all costs of running your business and a profit margin for growth. You also want to account for competitor pricing and the customer’s perception of value. Be careful to not underpricing or overpricing your product, as they can both give your audience a wrong idea about the quality or value of what you offer.
Set up a payment processor or potential distribution channels and platforms. Some small businesses opt for selling products through third parties such as Amazon, Shopify, or Etsy. Other businesses choose payment processing services such as PayPal, Square and Due depending on the service or product they offer.
10. Market Your Business/Create Your Offer
Develop a marketing plan and strategy to bring awareness to your consumer about what you are offering. If possible, start creating a demand for your product/service before you even have it available. Create effective messaging that will resonate with your audience and use the proper marketing channels to promote your business. Drive people to your website, generate leads and start building your community of customers.
You are now ready to launch and run your business! Remember to keep track of what is and isn’t working on the different aspects of your business. As you can see, there are many moving parts to a business, so don’t expect all of them to run smoothly at first. Test different pricing models, marketing strategies, payment processors, accounting software, and change or improve whatever you see fit. Once you have a working business model, start exploring scale-up options.